ABU DHABI // A debt restructuring deal has been struck between 34 defaulting Emirati entrepreneurs and the Khalifa Fund for Enterprise Development, sparing the small business owners from prosecution.
The Khalifa Fund, set up in 2007, is a Dh2 billion fund that grants interest-free loans to start-up companies.
Trouble with entrepreneurs who took the loans and then failed to honour the repayment terms came to a head on Sunday, when the fund initiated legal action to recover some of its capital. Thirty-four Emiratis who had failed to provide any justification for missing their instalments were told they could end up in court.
However, the fund has now agreed to restructure Dh3.5 million out of a total Dh41 million loan package, Al Ittihad reported this morning, after 11 beneficiaries paid Dh1 million in arrears over the past two days and another 23 provided proof of insolvency.
"All the beneficiaries have now pledged to regularise their standing within the next 45 days, and the goodwill they have shown was good enough for us," Abdullah Saeed Al Darmaki, the fund's chief executive told Al Ittihad, the Arabic-language sister paper of The National.
The loan restructuring is a reflection of "the fund's care not to harm the interests of its beneficiaries, to make things easy for them and to spread the culture of honouring one's financial commitments," Mr Al Darmaki said. "We thank entrepreneurs who [...] made efforts to straighten out their financial situation with the fund."